JIN MI FANG GP (08300) announced that the group has recently entered into an equity transfer agreement to acquire a total of 52% equity interest in Xishuangbanna Menghai Longpu Tianxia Tea Industry Co., Ltd. (the target company) through its wholly-owned subsidiary Fulton Asia Investment Limited (Fulton Asia) for a total nominal consideration of RMB 1 yuan.

The target company is a limited liability company established in 2018 in Xishuangbanna, Yunnan Province, China. Its business scope includes wholesale and retail of tea, pre-packaged food and bulk food (excluding refrigerated and frozen food); and tea planting, procurement, primary processing, refining and sales.

Upon completion of the acquisition, the target company will become a non-wholly owned subsidiary of the company, and its financial results will be consolidated into the company's consolidated financial statements. The acquisition aligns with the group's strategic initiative to develop its tea business sales and marketing.

The target company has approximately seven years of tea production and sales experience in China. Its business scope includes beverage production; food production; food sales; production of plastic packaging, containers and tools for food use; internet food sales (limited to pre-packaged food only); and internet sales (excluding sales of goods requiring specific licenses).

Following the acquisition, the target company will primarily focus on developing red tea, white tea, raw and ripe Pu-erh tea products produced from ancient tea trees that are hundreds or even thousands of years old. These products are characterized by their ability to be preserved for long periods, with their value increasing over time.

The acquisition is expected to enable the group to control the tea production process and ensure stable supply of raw materials and product quality. Meanwhile, the acquisition will also allow the group to fully utilize the target company's channels and market resources to rapidly enter new markets, expand its sales network and improve the group's overall corporate strategic layout.

Through the target company acquisition, the group can smoothly enter the tea market at lower cost while saving upfront investment, developing both domestic and international market sales. At the same time, it can leverage the group's existing online platform sales channels to promote online sales, develop independent tea brands, and utilize the target company's existing quality control management system to create high-quality tea products.

Therefore, the acquisition is expected to bring significant benefits to the group's sales growth, platform sales development, and product diversification.